... and dawn breaks over a bargain basement

RU4 a cut-price car? Now's the time to stalk the forecourts, says Gavin Green

This month, in a pounds 5bn-plus spending orgy, about 500,000 new cars take to the streets. Most people who rush to buy new cars in August choose to do so purely because of the extra kudos of getting a new letter at the beginning of the number plate. About one quarter of all car sales take place in this one, mad month.

It makes no sense, which is probably why this August, which sees the birth of the new plates, will probably be the last to witness the annual prefix change. The dealers have had enough, the car makers have had enough, and - if they have any sense - the punters should have had enough, too.

All those new cars leaving the showrooms means that loads of used cars are cluttering up the forecourts as trade-ins. So, while August may be a silly time to buy a new car (there are minimal discounts because of the high demand, and old stock is sold before the new 1998 cars arrive in September), it is a very good time to buy second hand. The trade has more used cars than it knows what to do with. All those orphans are looking for homes, and the trade is in a good mood to talk discounts.

We've chosen our top 10 used car buys, partly on their value, partly on their proven reliability and partly because they offer something special. All are between three and five years old, the typical age of car likely to be traded in against a new R-reg vehicle.

If you're after a small, inexpensive runabout, the recently superseded Citroen AX diesel is one of the very best buys. Smaller and cheaper than the Citroen Saxo which replaced it, the AX diesel is sprightly, lots of fun to drive and one of the most fuel-efficient cars ever launched. It's also slightly quirky, so it will stand out from the far more common (and far inferior) Metros and older Fiestas. A good 1994 L-reg AX diesel should cost about pounds 3,500.

If you want a bit more space, style and performance, then the Fiat Punto is an excellent buy. Unlike older Fiats, this one is well made and rust free. But, like most Fiats, it has an appealingly individualistic look, and drives well, notwithstanding a slightly jittery ride. A good 1994 M-reg 55SX five-door, which uses a gutsy 1.1-litre engine, will set you back about pounds 4,000.

The Toyota Corolla certainly isn't the top-value Escort-sized car on the used forecourts - it holds its value too well, from new. But if reliability and hassle-free service are the keys, then it's probably the best buy. Corollas regularly win customer satisfaction surveys in Britain and America, and they're easy to drive, a touch more interesting than the commoner Escorts or Astras, and they continue to hold their value even when bought second hand. A 1994 L-reg 1.6 GLi five-door hatch will cost you about pounds 7,000.

If you fancy something of Corolla size, but sportier, the VW Golf GTi is irresistible. They're still the best made of all hot hatches, are still great to drive, and can put up with all sorts of abuse from first owners. A K-reg 1993 three-door eight-valve model costs about pounds 8,500 in immaculate condition. Forget about the marginally quicker 16-valve GTi - it offers no practical extra benefit and has less low-end torque, so it actually feels slightly slower around town.

Less sporty, but still surprisingly good to drive, is the Nissan Primera. There's a new Primera out now, although it looks so much like the old model that you'd never know it. As with the latest Primera, the older vehicle drives in a sharp, entertaining manner, is well made (in Sunderland) and reliable. A K-reg 1993 2.0 hatch, such as the SLX, costs just over pounds 5,000. Like many Nissan hatches and saloons, Primeras have a habit of ending up on the minicab circuit, partly because of their reliability. Steer clear of second-hand buys with long aerials and air fresheners dangling from the rear-view mirror. Ex-minicabs are never good buys.

The Primera will seat five in comfort, but if that's not enough, you're better off with a good second-hand people carrier. The best is the Renault Espace, recently superseded by a bigger, pricier model. Very old Espaces did not have a good reputation for reliability, but things improved after a major facelift in 1991. If you've got pounds 10,000 to spend, you'll find a really nice 1994 L-reg 2.0 model, such as a seven-seater RN.

If you needs lots of space for luggage and DIY trips, rather than people, look for an estate. If you can afford it, Volvo and Mercedes estates are best, but if you're after better value, then one of my favourite load luggers is the Vauxhall Carlton estate. The Carlton has no sex appeal at all, but it is a handsome, honest, spacious vehicle, better as an estate than a saloon. And it's as solidly made as a Volvo, if not quite in Mercedes territory. Prices are nowhere near Mercedes levels either: a J-reg 1992 2.0i GL estate will cost just under pounds 6,000. Watch out though; there are quite a few dodgy, high-mileage Carlton estates about, many of which are former minicabs or trade vehicles.

From the sensible to the sensual. Alfa Romeos are emotional rather than logical buys, but the gorgeous 164 saloon does make some sense. It has a good reputation for reliability, even though build quality is still a bit variable from one model to the next. If you can afford it, go for the fabulous V6 version, powered by one of the world's great engines. A 1994 L-reg Green Cloverleaf version will cost about pounds 12,000.

Two final choices, for those with a bit more than average to spend. Forget about forking out pounds 50,000-plus on luxury saloons; pounds 20,000 will buy you a top-line four-door car. For that money, you'll get a good 1993 K-reg Lexus LS400. The LS400 is the world's most refined car. It has comparatively poor residual value because its badge lacks the snob appeal of Mercedes, BMW or Jaguar, but the LS400 is quieter, just as comfortable and more reliable. True, they look dull - like oversized versions of everyday Japanese saloons - but, to some, the anonymous terrorist-defying looks are part of its appeal. They clothe a car of awesome competence.

The Honda NSX has a similar problem. Rival Ferraris and Porsches hold their value much better because of the cachet of the nameplates. But the NSX is a better car than any Ferrari or Porsche, even if it looks more ordinary. Its V6 engine is fabulously powerful and musical, and the the car is studded with avant-garde features, not least the full aluminium body. Ferraris are crude by comparison. But whereas a 1994 Ferrari F355 will cost more than pounds 70,000, a 1994 L-reg NSX will cost a bit over pounds 35,000. Better still, a 1991 H-reg could be had for pounds 25,000.

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